INTERNATIONAL ANTI-CORRUPTION DAY
December 9th is International Anti-Corruption Day, and Canadian businesses should take note. While in the past Canada has been criticized for its lax enforcement of corruption and bribery offences, the legal community has noted a significant increase in anti-corruption investigations and prosecutions for such offences.
International Anti-Corruption Day seeks to raise awareness of corruption worldwide, and to highlight the international community's efforts to combat and prevent such behaviour. International efforts have resulted in a number of major anti-corruption conventions, including: the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention), which requires ratifying countries to take concrete steps to combat bribery, including criminalizing the bribery of foreign officials; and the United Nations Convention Against Corruption (UNCAC), which came into force in December 2005.
THE CORRUPTION OF FOREIGN PUBLIC OFFICIALS ACT
As part of Canada's commitment under the OECD Anti-Bribery Convention, the federal government passed the Corruption of Foreign Public Officials Act, S.C. 1998, c. 34 (CFPOA). The CFPOA makes it illegal to bribe a foreign public official to obtain or retain an advantage in the course of business. Specifically, section 3(1) of the CFPOA states:
3. (1) Every person commits an offence who, in order to obtain or retain an advantage in the course of business, directly or indirectly gives, offers or agrees to give or offer a loan, reward, advantage or benefit of any kind to a foreign public official or to any person for the benefit of a foreign public official
- as consideration for an act or omission by the official in connection with the performance of the official's duties or functions; or
- to induce the official to use his or her position to influence any acts or decisions of the foreign state or public international organization for which the official performs duties or functions.
CANADIAN INVESTIGATIONS UNDER THE CPFOA
As of October 17, 2011, the Department of Foreign Affairs and International Trade has stated that there are 22 ongoing investigations under the CFPOA.1 Historically, Canada has only prosecuted three cases under the CFPOA, of which only one is currently before the courts.2 In the recent case involving Niko Resources Ltd., the defendant, through its subsidiary company in Bangladesh, had provided a luxury SUV, valued at approximately $190,000.00, to the then Bangladeshi State Minister for Energy and Mineral Resources, in order to influence his dealings with the local subsidiary. After pleading guilty to one count of bribery under section 3(1)(b) of the CFPOA, the defendant was fined $9,499,000.00 and placed under the supervision of the court for three years to ensure compliance with the CFPOA.3
While many have criticized Canada's perceived inaction in investigating corruption related offences,4 recent Royal Canadian Mounted Police (RCMP) activity suggests that Canada is getting serious about prosecuting these types of offences. After Canada's ratification of the UNCAC in October 2007, the RCMP Commercial Crime Program created two anti-corruption teams, one based in Ottawa and the other in Calgary, to deal with offences under the CFPOA.5 This should signal to businesses that the Canadian government is taking its commitment to investigate and prosecute bribery and corruption seriously. Accordingly, corporate compliance is necessary to prevent costly fines, possible imprisonment and bad press.
WHAT CANADIAN BUSINESSES NEED TO KNOW
While, historically, bribery and corruption may have been a commonplace aspect of business in some parts of the world, businesses that maintain this worldview are taking a significant risk. In order to effectively shield themselves from liability, Canadian businesses to need to ensure that they are in constant compliance with the CFPOA and take active steps to ensure that their employees are aware of the CFPOA. Businesses should produce internal manuals and procedures for compliance with the CFPOA and any similar legislation of any foreign jurisdiction in which they conduct business. For example, both the American Foreign Corrupt Practices Act and the British Bribery Act have extra-territorial reach. A multinational corporation operating in different jurisdictions may have to be compliant with numerous, over-lapping anti-bribery and corruption laws.
Regardless of what particular laws may apply, it is crucial that employees know the bribing foreign officials is prohibited, and what types of behaviour would constitute an offence under the CFPOA. Employees should be required to report to senior management on any corruption encountered while conducting business, and businesses should get to know the people they work with on the ground in foreign jurisdictions. Finally, businesses should keep a record of any possible violations of the CFPOA discovered but not yet reported to the Canadian government.
The domestic landscape is changing, and Canada is catching up with the international community in becoming more serious about investigating and prosecuting international corruption and bribery. Canadian businesses would be remiss to not take their obligations under the CFPOA seriously.
1 Department of Foreign Affairs and International Trade, "Corporate Social Responsibility - Bribery and Corruption: The Twelfth Annual Report to Parliament (October 17, 2011)", online: DFAIT (http://www.international.gc.ca/trade-agreements-accords-commerciaux/ds/12-report-rapport.aspx?view=d).
4 See, for example, Organization for Economic Cooperation and Development, "Canada's enforcement of the foreign bribery offence still lagging; must urgently boost efforts to prosecute" (March 28, 2011), online: OECD (http://www.oecd.org/document/31/0,3746,en_21571361_44315115_47443999_1_1_1_1,00.html).
5 Royal Canadian Mounted Police, "International Corruption", online: RCMP (http://www.rcmp-grc.gc.ca/ccb-sddc/international-corrup-eng.htm).
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